What changed in this filing

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Item 1. Business

2021-09-16 compared with 2020-09-11 · 28 added, 24 removed, 142 unchanged (27% of the section changed)

Key Tronic Corporation (dba:

KeyTronicEMS Co.) was organized in 1969, as a Washington corporation that locally manufactured computer keyboards.

Key Tronic Corporation was organized in 1969, as a Washington corporation that locally manufactured computer keyboards.

The ability to design, build and deliver a quality product led us to become a leading independent manufacturer of keyboards for computers in the United States.

4 unchanged sentences

Our unique strategic attributes are based on our core strengths of innovative design and engineering expertise in electronics, mechanical engineering, sheet metal fabrication and stamping, and precision plastics combined with high-quality, low cost production, and assembly on an international basis while providing exceptional customer service.

These strengths have made our company a strong competitor in the electronic manufacturing services (EMS) market.

These strengths have made our company a strong competitor in the contract manufacturing market.

Our Industry and Strategy

The expansion of the EMS industry and our acquisitions have allowed us to continue to expand our customer base and the industries that we serve.

The expansion of the contract manufacturing industry and our acquisitions have allowed us to continue to expand our customer base and the industries that we serve.

The increase in new programs represents a growing portion of our revenue and a promising foundation for our future.

2 unchanged sentences

integrated electronic and mechanical engineering, precision plastic molding, sheet metal fabrication, printed circuit board (PCB) and complete product assembly, component selection, sourcing and procurement, worldwide logistics, and new product testing and production all at competitive pricing due to our global footprint.

We differentiate ourselves from others our size and larger in the EMS industry by providing vertical integration, a flexible and responsive approach to our customer’s changing supply demand, and complete design engineering support.

We believe that we are well positioned in the EMS industry to continue the expansion of our customer base and achieve long-term growth.

We differentiate ourselves from others our size and larger in the contract manufacturing industry by providing vertical integration, a flexible and responsive approach to our customer’s changing supply demand, and complete design engineering support.

We believe that we are well positioned in the contract manufacturing industry to continue the expansion of our customer base and achieve long-term growth.

Our unique blend of multinational facilities, vertical integration, centralized management, and core strengths continue to support our growth and our customers’ needs.

1 unchanged sentence

This international production capability provides our customers with the benefits of improved supply-chain management, reduced inventory, lower labor costs, lower transportation costs, and reduced product fulfillment time.

Given our competitive advantages and the growing pressure for new potential customers to move forward with their outsourcing strategies, we are strongly positioned to win new business in coming periods and grow our revenue and profits.

The EMS industry is intensely competitive.

Given our competitive advantages and the growing pressure for new potential customers to move forward with their outsourcing strategies, we feel that we are strongly positioned to win new business in coming periods and grow our revenue and profits.

The contract manufacturing industry is intensely competitive.

Although our customer base is growing, we still have less than 1% of the potential global market and our revenue can fluctuate significantly due to reliance on a concentrated base of customers.

We are planning for new customer growth in the coming quarters by securing new programs with new and existing customers, increasing our worldwide manufacturing capacity, leveraging further our design engineering capabilities and continuing to improve our manufacturing and procurement processes and capabilities.

We are planning for new customer growth in the coming quarters by seeking to secure new programs with new and existing customers, increase our worldwide manufacturing capacity, leverage further our design engineering capabilities and continue to improve our manufacturing and procurement processes and capabilities.

Ongoing challenges that we face include but are not limited to the following:

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We provide a mix of manufacturing services for outsourced Original Equipment Manufacturing (OEM) products.

We provide the following EMS services:

We provide the following services:

product design, surface mount technologies (SMT) and pin through hole capability for printed circuit board assembly, tool making, precision plastic molding, sheet metal fabrication and painting, liquid injection molding, complex assembly, automated tape winding, prototype design and full product assembly.

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We expect net sales to our five largest customers as a percentage of total net sales to approximate current levels going forward.

The following table represents all customers that represented 10% or more of total net sales during the last three fiscal years:

The following table represents the only customer that represented 10% or more of total net sales during the last three fiscal years:

Percentage of Net Sales by Fiscal Year

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We market our products and services primarily through our direct sales department which is comprised of strategically located field sales people and distributors.

We also maintain relationships with several independent sales organizations to assist in marketing our EMS product lines.

We also maintain relationships with several independent sales organizations to assist in marketing our product lines.

Manufacturing

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We have seen an increase in the success of providing design support on existing and potential customers in differentiating ourselves.

These services allow us to facilitate in optimizing new product designs, and the production processes of our customers’ programs.

We believe these services allow us to facilitate in optimizing new product designs, and the production processes of our customers’ programs.

Research, development, and engineering (RD&E) expenses consist principally of employee related costs, third party development costs, program materials costs, depreciation, and allocated information technology and facilities costs.

The market for the products and services we provide is highly competitive.

There are numerous competitors in the EMS industry, many of which have substantially more resources and are more geographically diverse than we are.

There are numerous competitors in the contract manufacturing industry, many of which have substantially more resources and are more geographically diverse than we are.

Some of our competitors have similar international production capabilities, large financial resources and some have substantially greater manufacturing, research and development, and marketing resources.

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Our name and logo are federally registered trademarks, and we believe they are valuable assets of our business.

We operate under the trade name “KeyTronicEMS” to better identify our primary business concentration in contract manufacturing in the EMS industry.

We consider our employees to be our primary strength and we make considerable efforts to maintain a well-qualified workforce.

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We also maintain share based compensation plans and other long-term incentive plans for certain employees and outside directors.

As of June 27, 2020 we had 5,741 full-time employees compared to 4,067 on June 29, 2019, and 4,701 on June 30, 2018.

As of July 3, 2021 we had 5,450 full-time employees compared to 5,741 on June 27, 2020, and 4,067 on June 29, 2019.

Since we can have significant fluctuations in product demand, we seek to maintain flexibility in our workforce by utilizing skilled temporary labor in some of our manufacturing facilities in addition to full-time employees.

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Information concerning net sales and long-lived assets (property, plant, and equipment) by geographic areas is set forth in Note 12, “Enterprise-Wide Disclosures” of the consolidated financial statements of this Annual Report on Form 10-K and that information is incorporated herein.

Governmental Regulation

Our operations are subject to certain foreign, federal, state and local regulations relating to, among others, environmental, waste management, labor and health and safety matters.

We have implemented processes and procedures to help ensure that our operations are in substantial compliance with all applicable regulations.

However, material costs and liabilities may arise from these requirements or from new or modified requirements, which could have a material adverse effect on our business and results of operations.

Executive Officers of the Registrant

6 unchanged sentences

Mackleit 53 Executive Vice President of Operations

Knaggs 39 Vice President of Quality and Regulatory Affairs

Knaggs 40 Executive Vice President of Quality and Information Systems

Orebaugh 50 Vice President of Engineering

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He also holds a MBA from Gonzaga University.

KNAGGS – Vice President of Quality and Regulatory Affairs

Knaggs, age 39, has been Vice President of Quality and Regulatory Affairs since November 2017.

Previously he was Vice President of Quality since October 2016.

Before joining KeyTronicEMS, Mr.

KNAGGS – Executive Vice President of Quality, Regulatory Affairs and Information Systems

Knaggs, age 40, has been Executive Vice President of Quality and Information Systems since May 2021.

Previously, he was Vice President of Quality and Regulatory Affairs from November 2017 to May 2021.

He was Vice President of Quality since October 2016.

Before joining Key Tronic, Mr.

Knaggs worked at Telect, Inc.

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Thomas Despres, age 59, has been Vice President of Southwest Operations since November 2017.

Prior to joining KeyTronicEMS, Mr.

Prior to joining Key Tronic, Mr.

Despres worked for Gates Corporation as Plant General Manager from July 2017 to November 2017.

5 unchanged sentences

From March 2006 to August 2007, he served as Senior Buyer/Planner for Honeywell Specialty Materials and from June 2005 to March 2006 as Purchasing Manager for MRV Communications.

From May 2000 to June 2005, he served as a Field and Inside Sales Associate for Arrow Electronics and from October 1991 to May 2000 held various positons at Alesis.

From May 2000 to June 2005, he served as a Field and Inside Sales Associate for Arrow Electronics and from October 1991 to May 2000 held various positions at Alesis.

Available Information

Our principal executive offices are located at 4424 North Sullivan Road, Spokane Valley, Washington 99216, and our telephone number is (509) 928-8000.

Our website is located at http://www.keytronic.com where filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or current reports on Form 8-K are available after they have been filed with the Securities and Exchange Commission.

Our website is located at http://www.keytronic.com where filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or current reports on Form 8-K are available free of charge after they have been filed with the Securities and Exchange Commission.

The information presented on our website currently and in the future is not considered to be part of this document or any document incorporated by reference in this document.

In addition, the SEC maintains an Internet site (at www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business